Jim Cramer says Big Tech cannot afford to be cheap on AI spending

According to CNBC's Jim Cramer, major players in cloud computing cannot afford to cut back on their investments in artificial intelligence infrastructure. Cramer's remarks came after he reflected on a recent description of the surge in data center and AI-related stocks as reminiscent of the saying, 'if you build it, they will come.' He emphasized that this view overlooks a critical fact: the customers are already present, and cloud providers are under pressure to meet their demands. Cramer stated, "The whole point of this data center rally is that it's not a fairy tale, because the data centers are being built and the customers really are coming. They are on the playing field. They are in the seats... and the momentum is building for every seat to be filled." He cited Amazon’s substantial investment in its cloud division, Amazon Web Services, as proof that the AI expansion is no longer a speculative endeavor. With Amazon planning to invest around $200 billion in capital expenditures this year, a significant portion will focus on boosting data center capacity amid fierce competition among leading cloud providers. Cramer warned that failing to invest in infrastructure could result in lost opportunities, referencing Amazon CEO Andy Jassy's emphasis on the necessity of ongoing investment. Cramer highlighted that key clients such as OpenAI, Anthropic, and Meta are actively seeking computing power and infrastructure partners capable of managing extensive AI workloads. He noted, "They — meaning big-time paying potential customers — are already here, and unless you have spent the money to build the infrastructure, they will go somewhere else." He pointed out that many skeptics continue to underestimate the scale and urgency of the ongoing cycle of AI-related spending. Companies that decide to reduce their investments risk losing business to competitors who are dedicated to expanding their capabilities. Cramer concluded, “If Amazon doesn't put money in, then numbers have to go down, not up, because that business and its billions of dollars in payments will go to Alphabet or Microsoft. When it comes to the data center, if you build it, they really will come. And if you don't build it, they will simply go to the other guy who did."